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Returns Processing
Accounting
Cost Accounting
Business Accounting
Basic Accounting Process Consignment Accounting Bank Reconciliation Statement Partnership Accounts Final Accounts
Purchase Returns
Considering a transaction of credit purchases, the two elements effected would be the Purchases a/c and the Vendor a/c. Purchase of stock, being an expenditure, the Purchases a/c is debited and the Vendor being the benefit giver the Vendor a/c is credited. Therefore in recording a transaction of Purchase Returns, the Vendor a/c is debited and the Purchases a/c is credited.
Sales Returns
Considering a transaction of credit sales, the two elements effected would be the Sales a/c and the Buyer a/c. Sale of stock, being an income, the Sales a/c is credited and the Buyer being the benefit receiver the Buyer a/c is debited. Therefore in recording a transaction of Sales Return, the Buyer a/c is credited and the Sales a/c is debited.
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Journal in the books of M/s __ for the period from ____ to _____ Date
June 15th
V/R No.
Particulars
Purchases a/c To Mr. Ghavri a/c [Being the value of goods purchased on credit from Mr. Ghavri ] Mr. Ghavri a/c To Purchases a/c [Being the value of goods purchased on credit from Mr. Ghavri returned. ] Dr
L/F
June 21st
Dr
3,000 3,000
Dr
Date
15/06/05
Purchases a/c
Particulars
To Mr. Ghavri a/c
Cr
Particulars
By Mr. Ghavri a/c
J/F
Date
21/06/05
J/F
sub-total
sub-total
http://www.futureaccountant.com/accounting-process/study-notes/purchase-sales-returns.php
5/1/2012
Page 2 of 5
21/06/05
By Balance c/d
21,000 24,000
Total
22/06/05 To Balance b/d
24,000 21,000
Total
Dr
Date
21/06/05
Cr
Particulars
By Purchases a/c
J/F
Date
15/06/05
J/F
sub-total
21/06/05 To Balance c/d 21,000 24,000
sub-total Total
22/06/05 By Balance b/d
Total
CA Final CWA Foundation CWA Inter CWA Final CS Foundation CS Inter CS Final
Journal in the books of M/s __ for the period from ____ to _____ Date
June 15th
V/R No.
Particulars
Ms. Sunanda a/c To Sales a/c [Being the value of goods sold on credit to Ms. Sunanda ] Sales a/c To Ms. Sunanda a/c [Being the value of goods sold on credit to Ms. Sunanda being returned. ] Dr
L/F
June 17th
Dr
48,000 48,000
Dr
Date
15/06/05
Sales a/c
Particulars
To Ms. Sunanda a/c
Cr
Particulars
By Ms. Sunanda a/c
J/F
Date
17/06/05
J/F
sub-total
17/06/05 To Balance c/d
sub-total Total
18/06/05 To Balance b/d
Total
Dr
Date
21/06/05
Cr
Particulars
By Sales a/c
J/F
Date
15/06/05
J/F
sub-total Total
18/06/05 By Balance b/d
sub-total
21/06/05 By Balance c/d
17,000 65,000
65,000 17,000
Total
When the goods are returned these charges which have been expended at the time of the original transaction may go waste. Additional transaction costs like transportation cost, packing cost for returning the goods etc., may also have to be incurred in relation to the return transactions. Whoever bears the additional cost, it surely is a waste as it benefits neither of the parties to the transaction. It would be impractical to think of in terms of eliminating the possibility of such transaction. Their occurrence is natural and acceptable. What we look at is to reduce the possibility of returns. An organisation should always pay attention to these whenever there
http://www.futureaccountant.com/accounting-process/study-notes/purchase-sales-returns.php
5/1/2012
Page 3 of 5
are returns beyond a certain level, whether they be purchase returns or sales returns.
Journal in the books of M/s __ for the period from ____ to _____ Date
June 15th
V/R No.
Particulars
Purchases a/c To Mr. Ghavri a/c [Being the value of goods purchased on credit from Mr. Ghavri ] Mr. Ghavri a/c To Purchase Returns a/c [Being the value of goods purchased on credit from Mr. Ghavri returned. ] Dr
L/F
June 21st
Dr
3,000 3,000
http://www.futureaccountant.com/accounting-process/study-notes/purchase-sales-returns.php
5/1/2012
Page 4 of 5
Dr
Date
15/06/05
Purchases a/c
Particulars
To Mr. Ghavri a/c
Cr
Particulars J/F Amount (in Rs)
J/F
Date
sub-total Total
22/06/05 To Balance b/d
sub-total
21/06/05 By Balance c/d 24,000 24,000
24,000 24,000
Total
Dr
Date Particulars J/F
Cr
Particulars
By Mr. Ghavri a/c
J/F
sub-total
21/06/05 By Balance c/d 3,000 3,000
sub-total Total
22/06/05 To Balance b/d 3,000 3,000
Total
Dr
Date
21/06/05
Cr
Particulars
By Purchases a/c
J/F
Date
15/06/05
J/F
sub-total
21/06/05 To Balance c/d 21,000 24,000
sub-total Total
22/06/05 By Balance b/d
24,000
Total
24,000 21,000
Net Purchases
The net purchases can be obtained at any time by setting off the balances in the Purchases a/c and the Purchase Returns a/c.
Journal in the books of M/s __ for the period from ____ to _____ Date
June 15th
V/R No.
Particulars
Ms. Sunanda a/c To Sales a/c [Being the value of goods sold on credit to Ms. Sunanda ] Sales Returns a/c To Ms. Sunanda a/c [Being the value of goods sold on credit to Ms. Sunanda being returned. ] Dr
L/F
June 17th
Dr
48,000 48,000
Dr
Date Particulars J/F
Sales a/c
Amount (in Rs) Date
17/06/05
Cr
Particulars
By Ms. Sunanda a/c
J/F
sub-total
17/06/05 To Balance c/d 65,000 65,000
sub-total Total
18/06/05 By Balance b/d
Total
65,000 65,000
Dr
Date
17/06/05
Cr
Particulars J/F Amount (in Rs)
J/F
Date
sub-total Total
18/06/05 To Balance b/d
sub-total
17/06/05 By Balance c/d 48,000 48,000
48,000 48,000
Total
http://www.futureaccountant.com/accounting-process/study-notes/purchase-sales-returns.php
5/1/2012
Page 5 of 5
Dr
Date
21/06/05
Cr
Particulars
By Sales Returns a/c
J/F
Date
15/06/05
J/F
sub-total Total
18/06/05 By Balance b/d
sub-total
21/06/05 By Balance c/d
17,000 65,000
65,000 17,000
Total
Net Sales
The net sales can be obtained at any time by setting off the balances in the Sales a/c and the Sales Returns a/c.
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http://www.futureaccountant.com/accounting-process/study-notes/purchase-sales-returns.php
5/1/2012